Mineral Resources Confirms Aquila Stake Buy
By Ross Kelly
By Ross Kelly
SYDNEY-- Mineral Resources Ltd. said it bought a 12.8% stake in takeover target Aquila Resources Ltd. to gain a foothold in a 7.4 billion Australian dollar (US$6.9 billion) iron-ore project, cooling speculation of a rival bid for the mining company.
Aquila last month received a takeover bid led by China's Boasteel Group valuing it at A$1.4 billion.
Mineral Resources said Thursday that taking a strategic stake will give it a chance to participate in the development of Aquila's West Pilbara iron-ore project in Western Australia state. The company said it had already drawn up a development plan where it would take responsibility for all processing and mine-related infrastructure, as well as the supply chain through to shiploading.
"We have the financial capacity to make a meaningful capital contribution toward the development of the project," Chris Ellison, chief executive of Mineral Resources, said in a statement.
Mr. Eillson said Mineral Resources was prepared to work with Aquila and Baosteel to bring the mine into production.
Baosteel, which owns China's largest listed steel mill, bought 15% of Aquila in 2009 when iron-ore prices were rising, and later raised its stake to 20%. It was attracted to Aquila's plans for the West Pilbara project, which is expected eventually to produce more than 30 million metric tons of iron ore a year.
Baosteel first announced its plan to work with rail-freight hauler Aurizon Holdings Ltd. on a joint takeover offer for Aquila last month. Under the proposal, Baosteel would own as much as 85% of Aquila, which also owns an undeveloped coking-coal prospect in Queensland state. Aurizon would take the remaining interest.
Aquila, whose executive chairman and co-founder Tony Poli holds 29% of the company, hasn't so far responded to Baosteel's proposal.
Write to Ross Kelly at ross.kelly@wsj.com
(END) Dow Jones Newswires
June 11, 2014 21:45 ET (01:45 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.DN201406110134542014-06-12 01:45:00.0004MT649O372THLSFMSJIUDBCH8EDJNF
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